The benefits of effective Software Asset Management (SAM) – maximize ROI

Spending on software and cloud computing continues to grow at an unprecedented rate. According to Gartner®¹: “Worldwide end-user spending on public cloud services is forecast to grow 20.4% to total $675.4 billion in 2024, up from $561 billion in 2023.”

“Because of this continued growth, we expect public cloud end-user spending to eclipse the one trillion-dollar mark before the end of this decade”, Sid Nag, Vice President Analyst at Gartner², said in May 2024.

For business, an effective Software Asset Management (SAM) program is key to ensuring that its IT and cloud estate are both fit for purpose and maximize return on investment (ROI). In this article, we’ll outline the main benefits of software asset management for businesses, all of which can help improve ROI.

Why SAM?

The main benefit of software asset management is its ability to give businesses a holistic view of their software spending, usage, and needs. Increasingly, it is an essential component of company strategy and forecasting, optimizing functionality, and managing costs.

SAM is not an individual or a quick-fix application. It is a continuous way of working that puts the operation of software and IT systems at the heart of a business and gives it the strength and flexibility to meet performance targets in a way that is secure, efficient, and cost-effective.

A SAM team will typically include dedicated SAM specialists, IT, legal, procurement, and finance, with C-suite sponsorship ensuring that decisions are aligned with future priorities as well as current business needs. The team will work closely with information security specialists and can support teams working on environmental sustainability.

Software asset management benefits

Here are some of the ways in which an effective SAM program enables businesses to significantly reduce costs and maximize ROI with software asset management:

Compliance

A decade ago, SAM was best known as a process to ensure compliance with licensing requirements. It gives businesses insights and ammunition when responding to software audits or true-ups by vendors by presenting them with consistent and accurate data on their licensing entitlements. Software audits are time-consuming and expensive and can result in unexpected hefty penalties for non-compliance or expensive license costs which good SAM practices can help to minimize or better still, avoid. SAM still does that, but today it can do so much more through a live, centralized view of the entire software and IT estate.

Cost-control

SAM tools are the key to managing inventory. They can monitor the use and performance of software licenses so those not used or under-used can be removed or re-assigned, generating savings, and improving SAM ROI. Redundant software assets can be disposed of securely and in an environmentally responsible way.

Procurement support is another key benefit of software asset management. When it comes to procurement, or re-negotiating vendor contracts, high-quality SAM data puts the business in a strong negotiating position to minimize cost and maximize ROI, particularly by avoiding unnecessary expenditure. The growing dominance of cloud computing means it is more important than ever that requirements are aligned with business needs. Effective SAM will ensure that you are not overspending.

Security

Old software (more than two years old) is a known security risk. Since the pandemic accelerated a move to hybrid working and a shift to the cloud, identity and access management (IAM) has also emerged as a significant area of potential vulnerability. SAM tools benefit businesses by ensuring that the latest software versions and updates are installed, maximizing protection from security breaches, and enabling closer management of remote-access functions. They can also help your business remain compliant with changing legislation on the storage of personal data.

Productivity

A well-managed software system allows staff to focus on work rather than software-related issues. Smooth-running systems boost employee productivity and satisfaction. The speed with which SAM data is available means that processes and assets can be tweaked quickly to respond to changing market conditions or user needs. SAM benefits from responsiveness which can reduce costs and generate savings.

Sustainability

An important benefits of software asset management for many businesses are the eco-friendly business practices it can help introduce. Together with the fast-growing demand for cloud computing is increased awareness of the sustainability challenges this poses. Through optimization, SAM processes can minimize energy consumption and emissions produced by cloud solutions. A similar process of optimization also applies to hardware, reducing overconsumption and minimizing the amount of product to be disposed of.

Forecasting

As cloud costs rise in line with digital transformation, application modernization and the drive towards generative AI, effective SAM is crucial to spending control and financial forecasting. This enables better decision-making and planning to future-proof your business.

SAM tools in isolation will not transform a business, there needs to be strategic involvement to make best use of this data.

Introducing SAM to your business

We’ve covered the main benefits of SAM for businesses, but how do you start implementing these practices?

First, work out what you have and how it is being used. Second, begin to build a team with the right specialist skills or bring in SAM advisory consultants who can help with vendor relations and procurement, optimization, and processes (including specific SAM tools), and change management.

Next, agree on a SAM policy and strategy with KPIs to monitor effectiveness and ensure implementation remains on track. Communicate widely. Effective engagement with all areas of the business is key to ensuring that any new procedures and practices are adhered to as everyone in the organization understands their contribution.

Review and evaluate regularly to ensure that the use of software assets and ROI are maximized and meet changing strategic goals.

Why SoftwareOne?

SAM and FinOps are increasingly converging, and the rapid growth of the cloud, and remote and hybrid working, has added a new dimension to business operations.

Because of the growing complexity of the IT estate, SAM is a process that often benefits from specialist help. Gartner3 says: “By 2025, over 40% of organizations will utilize managed services to address their SAM and FinOps requirements.”

Those organizations that are already doing this will have an advantage.

SoftwareOne (formerly Crayon) has been working with Vestas, a leading manufacturer of wind turbines, since 2023. The company lacked oversight of the 5,000 applications running across 45,000 laptops globally. Working with SoftwareOne to optimize its estate, SAM practices have already saved the company more than €3 million, and further refinements are ongoing.

Access to experts at key moments can prove very cost-effective. For instance, detailed vendor knowledge is especially useful in the run-up to contract renewals to ensure the best value from existing and new contracts.

SoftwareOne's approach uses robust SAM data to focus on monetized cost savings and cost avoidance. Offering SAM and procurement hand-in-hand, SoftwareOne leverages SAM data to ensure the best possible outcomes for customers. Savings can be made up of direct savings, cost avoidance, and reduced exposure to financial risk. Our software asset management approach maximizes ROI at every level of business software operations.

Not merely SAM-certified experts, we are clear leaders in software asset management and digital transformation services and have the largest independent global cloud economics practice.

We are trusted software asset management advisors to many of the world's leading companies. We believe the independent verification of this is in the 2024 Gartner® Magic Quadrant™ for Software Asset Management Managed Services report4 where SoftwareOne is named a Leader.

Building on more than 20 years’ experience and a global reputation, SoftwareOne’s customer-centric approach is what makes it stand out from the crowd.

SoftwareOne has deep relationships with all the major software publishers and hyperscaler cloud partners, including Microsoft, IBM, Oracle, Google, AWS, and VMware.

Every contract is assessed alongside the customer, to ensure that it delivers not just for their current needs but also on their ambitious plans for the future. SoftwareOne is your trusted partner, working hand in hand in an increasingly complex world to ensure the future success of your business. Contact us to see how we can help you.